“Because the insurance broker is so critical to the development and implementation of the risk-financing plan, selecting a broker should be undertaken in a highly structured manner.”

“Because the insurance broker is so critical to the development and implementation of the risk-financing plan, selecting a broker should be undertaken in a highly structured manner.”

• “Because the insurance broker is so critical to the development and implementation of the risk-financing plan, selecting a broker should be undertaken in a highly structured manner.”

• Managing Medical Professional Liability Risk: An Insurance Primer

• Published by University Health System Consortium

Definitions

• Definitions

• Broker
• Agent
• Direct writer
• “Going direct”

Services performed

• Services performed

• Insurance placement
• Policy review
• Claims handling
• Loss control consulting
• Actuarial services
• Business continuity planning
• Captive feasibility and management
• Risk management department staffing

Players

• Players

• Major brokers
• Marsh, Aon, Gallagher, Willis
• Regional Brokers or Agents
• Local Agents
• Niche Brokers
• Consultants

Selection

• Selection

• Needs assessment, service requirements
• Relationship with broker/underwriter (middleman or partner)
• Bid insurance versus bid brokerage services
• Constraints: institutional or legal
• Politics
• Decision method: executive versus committee approach
• Broker Agreement

Selection – Compensation

• Selection – Compensation

• Fee
• Commission
• Incentive based

Bidding Insurance

• Bidding Insurance

• Determining who can bid
• RFP for insurance only or also insurance broker/agent services
• Unstructured bidding
• Bidders assigned insurance markets

Bidding Services

• Bidding Services

• RFQ: written response
• RFP to top responders to RFQ: written or oral presentation
• Contract
• Broker of record letters
• Insurance required of broker

Pitfalls

• Pitfalls

• Commission driven premium pricing
• Selecting firm/selecting individuals
• One broker or more?
• Ethics
• Lunch, dinner, baseball
• Underwriting trips

Monitoring the relationship

• Monitoring the relationship

• Quality of service
• Evaluation against stated service requirements
• Qualitative evaluation
• Broker self-evaluation: stewardship reports
• Compensation – commission + contingent (MSA) commission + service fee + incentives??
• Broker reporting
• Insurer reporting

Questions?

• Questions?

• Thank you for your time